Brad DeLong calls out the LA Times writer for inaccurate piece about Jason Furman

[ProSense]

Thursday, June 12, 2008

Jason Furman, Social Security, and Walmart

Seeing that he's made the cover of the NY Times this morning, I was going to write up a summary of the controversy over Jason, but Mark Thoma beat me to it, with a very good post here.

It's a bit disingenuous to suggest that the views of the economic policy director don't matter, in part because campaign jobs lead to administration jobs. Given his position, it's a good bet that if Obama wins, Jason will be director of the National Economic Council, making him the President's main interface for economic policy. During the campaign, Jason will be working on drafts of economic policy speeches, sending Obama daily memos on economic issues, and screening the huge mass of external economic policy advisers trying to get their word in with Obama, so his own views have to come into play somewhat. At the same time, Jason is a skilled campaign staffer and technocrat--not an ideologue--and he's not going to be trying to sell Obama on a particular economic vision. Plus, given that, by all accounts, Obama likes to seek out a variety of viewpoints and then make the call himself, Jason's views are not going to be a huge factor.

Jason Furman and Social Security

As Brad Delong points out, this article in the LA Times completely misrepresents Obama Economic Policy Director Jason Furman's position on Social Security privatization. In fact, Jason is the economist who did the most to supply the intellectual ammunition to gun down Bush's proposal during the great Social Security battle of 2005. Jason, with help from Dean Baker and Brad Delong, was key to victory in that struggle. It's not hyperbole to say that without their efforts (especially Jason's), Bush might have succeeded in his efforts to gut the most important social safety net we have. See this paper for one of Jason's contributions in that battle.

Regarding the broader concerns raised in the article, I think Jared Bernstein has it right:
One economist from the left-leaning Economic Policy Institute, Jared Bernstein, offered praise for Furman, saying he understood why some critics were unhappy, though he thought their fears were misplaced.

"I understand the concerns, given positions he has taken" on some issues, Bernstein said. "But I am 110% certain that it will be Barack Obama -- not Jason Furman or Robert Rubin -- who will be setting the policies for the Obama administration."

Although Furman has directed think-tank work on some controversial topics, Bernstein said he would be an effective campaign staff member. "If you look at his body of work, it's quite clear that the ultimate goal is very much the same as Obama's," he said.

June 11, 2008

Why Oh Why Can't We Have a Better Press Corps? (Tom Hamburger of the Los Angeles Times Edition)

To: Tom Hamburger
From: Brad DeLong
About: Your Needed Change of Career...

On June 11, 2008, you wrote:

Obama's selection of Jason Furman as economic advisor is criticized: (Jason Furman) was also quoted in a transcript from a CNBC interview in 2006 as suggesting openness to changes in Social Security that might include private accounts and benefit cuts. The approach he described sounded similar in some ways to that proposed at the time by President Bush. The Bush private accounts idea was anathema to labor activists, who successfully challenged the president's initiative.

<...>

Jason Furman was not a friend, advocate, or supporter of President Bush's Social Security privatization plan back in 2005, but instead one of its most strident and effective opponents--as you would have found almost immediately had you typed "jason furman social security" into your web browser's google box, and followed the first substantive link to http://www.cbpp.org/5-10-05socsec.htm, which gives Jason Furman's full view of the Bush Privatization plan.

Why didn't you google "Jason Furman social security" before your wrote?

And when and how are you going to retract large portions of your article?

[babylonsister]

1. Excellent! He was picked for a reason; I'm not second-guessing

this campaign's choices.

[Cha]

6. Precisely..and I"m sure

his VP choice will have the Big Picture in mind.

[seasat]

2. Now the media is getting ridiculous

They're trying to dredge up controversy on every issue and then present a balanced approach.

We have McCain's main economic adviser as Phil Gramm, the guy who deregulated derivatives for Enron along with his wife who went to work for Enron. A guy who lobbied for and stills worked as vice chair for UBS which is involved in substandard loans. A guy who wrote McCain's policy on the housing market. Nary a peep from the media about him.

We have John McCain himself who supports Social Security privatization. No word in that story about that.

Yet they attack a guy who published for the Center on Budget and Policy Priorities this:

The President’s proposals would have a significant impact for the foreseeable future on deficits and the federal debt. According to the Social Security actuaries, the President’s private accounts would cost $723 billion over the first 7 fiscal years (from 2009 to 2015).<15> The number is artificially low, however, because the private accounts would only be available to all workers for the last four of these seven years.<16>

Over longer periods, the effect on the debt would be considerably greater. Over the first 10 years that the plan would be in effect (2009 – 2018), the Administration’s private accounts would add $1.4 trillion to the debt. The accounts would cause the debt to increase by another $3.9 trillion in the decade after that, for a total of $5.3 trillion over the first 20 years.<17>
...
The debt would remain elevated for a number of decades after that. In 2050, the amount by which the debt would be larger, as a result of the President’s Social Security plan, would equal 19 percent of GDP. The increase in the debt that the plan would cause would be equal to about half of the entire federal debt today. The debt would remain higher through 2069 than it would be under current law.
...
In contrast, a traditional Social Security solvency plan that includes a balanced mix of benefit reductions and new revenues, as the 1983 Social Security legislation did, and that does not feature private accounts would begin to reduce the debt in its first decade and would continue to do so thereafter. The plan designed by Diamond and Orszag would have that effect. Under such a course, the amount of debt reduction by 2050 would be substantial.

It sounds to me that he might support increasing revenues and reducing SS benefits for the wealthy but, unlike John McCain, he definitely does not support private accounts.

[Larkspur]

5. And Furman is the director of Robert Rubin's The Hamilton Project

Strategists Bank on Budget-Neutral Policies

In a suite of offices three doors down Massachusetts Avenue from the Brookings Institution headquarters, Hillary Clinton's closest Wall Street allies are drawing up economic policy for the next Democratic administration.

The offices belong to the Hamilton Project, a small think tank created by Robert E. Rubin, Bill Clinton's Treasury secretary and key economic adviser, and former Treasury deputy secretary Roger C. Altman, who would be a front-runner for the same job in a new Clinton administration.

The project's research, so far, would be familiar to students of the first Clinton administration: creative, wonky proposals for softening the impact of globalization without interfering with international trade, most of them crafted with an eye to fiscal austerity and a balanced budget.

The key advisory role played by Rubin and Altman, two pre-eminent Democratic Party economic centrists, has drawn criticism from more left-leaning economic voices, who also tweak the presumptive nature of the project, given that not a single vote has yet been cast in the 2008 campaign. "One wag told me that their effort looks a lot like drafting the 2009 budget," said Lawrence Mishel, president of the Economic Policy Institute, a think tank aligned with the more populist, labor-friendly segment of the Democratic Party.

SNIP

Lawrence Mishel would have been a better choice for Obama's economic director. He's the President of the liberal think tank Economic Policy Institute. You can find his bio here http://www.epi.org/content.cfm/economist .

Mishel comes from the viewpoint of working American. Furman comes from the viewpoint of corporate America.

[ProSense]

7. It's like McCain's actions and people are invisible. n/t

[sandnsea]

3. needed change of career, lol

I'm glad I'm not the only one who tells these people that they ought to remember what the hell they're getting paid the big bucks for. I'm sick of these hit pieces disguised as journalism.

[Larkspur]

4. Isn't this the same Furman who wrote the Walmart was a Progressive Business Model?

Wal-Mart: A Progressive Success Story

SNIP

There is little dispute that Wal-Mart’s price reductions have benefited the 120 million
American workers employed outside of the retail sector. Plausible estimates of the magnitude of
the savings from Wal-Mart are enormous – a total of $263 billion in 2004, or $2,329 per
household.

Even if you grant that Wal-Mart hurts workers in the retail sector – and the evidence
for this is far from clear – the magnitude of any potential harm is small in comparison. One
study, for example, found that the “Wal-Mart effect” lowered retail wages by $4.7 billion in
2000.

SNIP

Attempts to limit the spread of Wal-Mart and similar “big box” stores do not just limit the
benefits of lower prices to moderate-income consumers, they also limit the job opportunities that
Wal-Mart and other retailers provide. More puzzling is that some progressives have described
Medicaid, food stamps, the EITC, and public housing assistance as “corporate welfare.”

The right response to Wal-Mart is not to scale back these programs but to expand them in order to
fulfill the goal of making work pay.
SNIP

[TexasObserver]

8. Advisers advise, and they need to have the background to do so.

Obama picks advisers to advise him. I will judge Obama not by his advisers, but by whatever positions OBAMA supports and issues. It's downright silly for people to get the vapors over who Obama has as an adviser, unless it's someone actually on somebody else's payroll.

[slinkerwink]

9. The LA Times has published several hit articles on Obama this season. They're to be taken

with a grain of salt.

[JimGinPA]

10. I Commented Yesterday That The LA Times Had Been Doing A Lot Of Hit Pieces On Obama Lately...

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=6348223&mesg_id=6348856

I was "informed" it's called "Journalism".

K&R